TomTom Q2 2016 financial results presentation

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Harold Goddijn CEO Taco Titulaer CFO 19 July 2016 Q2 2016 RESULTS

Transcript of TomTom Q2 2016 financial results presentation

Page 1: TomTom Q2 2016 financial results presentation

Harold Goddijn – CEO

Taco Titulaer – CFO

19 July 2016

Q2 2016 RESULTS

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STRATEGIC PRIORITIES AND Q2 HIGHLIGHTS

• Extract value from the PND category; Establish a sport product business

o Launched three new portable navigation devices within the TomTom START range

o MySports reached 1 million users

• Take advantage of the new map-making platform to deliver better maps, at lower cost, in real-time

o HD Map and RoadDNA coverage launched in 17 states across the United States

• Win market share in Automotive; Maximise Licensing revenue via existing and new customers

o Volvo Cars selected TomTom maps, traffic and software for its new infotainment platform

• Grow WEBFLEET installed base

o 652k subscriptions; QoQ net additions in Q2 record high at 27k

• Diversify into the Connected Car services industry using our Telematics capabilities and Automotive

relationships

o Collaboration with PSA Group to offer fleet management services

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FINANCIAL HIGHLIGHTS

1 Earnings per fully diluted share count adjusted for acquisition-related amortisation & gain on a post-tax basis

• Group revenue of €265 million (Q2 '15: €265 million)

• Gross margin of 55% (Q2 '15: 51%)

• EBITDA of €44 million (Q2 '15: €28 million)

• Net result of €12 million (Q2 '15: €3 million)

• Adjusted EPS1 of €0.10 (Q2 '15: €0.05)

• Net cash position of €58 million (Q1 '16: €50 million)

• Revenue adversely impacted by FX movements

– Effect of GBP depreciation was €2 million, effect of USD depreciation was €1 million

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FULL YEAR OUTLOOK 2016 RE-ITERATED

1 Earnings per fully diluted share count adjusted for acquisition-related amortisation & gain on a post-tax basis 2 In 2015 CAPEX was €108 million (excluding acquisitions) and OPEX was €518 million

• Revenue to grow to around €1,050 million

• Adjusted EPS¹ expected to grow by around 10% to €0.23

• We expect the level of investment (both CAPEX and OPEX) to be higher than in 20152

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THANK YOU

Any questions?

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REVENUE BREAKDOWN – QUARTERLY

BREAKDOWN BY SEGMENT BREAKDOWN BY CATEGORY

Q2 '16 group revenue: €265 million; Q2 '15: €265 million

59%

13%

13%

15%

Q2 '16

Consumer

Automotive

Licensing

Telematics

€157 million

€35 million

€33 million

€40 million

62%10%

15%

13%

Q2 '15

Consumer

Automotive

Licensing

Telematics

€165 million

€26 million

€39 million

€35 million

54%

46%

Q2 '16

Hardware

Content & Services

€143 million

€122 million

56%

44%

Q2 '15

Hardware

Content & Services

€149 million

€115 million

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QUARTERLY P&L STATISTICS

1 Earnings per fully diluted share count adjusted for acquisition-related amortisation & gain on a post-tax basis

(in € thousands) Q1 '15 Q2' 15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 H1 '16 FY '15

REVENUE 205,275 264,613 254,231 282,488 217,155 265,225 482,380 1,006,607

Cost of sales 95,403 129,993 119,161 143,523 93,850 119,967 213,817 488,080

GROSS RESULT 109,872 134,620 135,070 138,965 123,305 145,258 268,563 518,527

Research and development expenses 43,290 52,071 43,275 46,807 44,533 45,675 90,208 185,443

Amortisation of technology and databases 18,522 18,644 19,589 19,939 20,626 21,107 41,733 76,694

Marketing expenses 9,748 25,297 22,616 25,777 15,058 21,545 36,603 83,438

Selling, general and administrative expenses 43,381 38,029 44,703 46,239 47,401 44,179 91,580 172,352

TOTAL OPERATING EXPENSES 114,941 134,041 130,183 138,762 127,618 132,506 260,124 517,927

OPERATING RESULT (EBIT) -5,069 579 4,887 203 -4,313 12,752 8,439 600

EBITDA 21,424 27,841 32,692 41,739 25,557 43,693 69,250 123,696

Interest result -204 -223 -328 -170 -305 -377 -682 -925

Other financial result -2,574 301 -2,633 -2,437 1,711 -1,233 478 -7,343

Result of associates 97 116 -210 164 327 134 461 167

RESULT BEFORE TAX -7,750 773 1,716 -2,240 -2,580 11,276 8,696 -7,501

Income tax gain / (charge) 845 1,762 8 23,179 7,346 911 8,257 25,794

NET RESULT -6,905 2,535 1,724 20,939 4,766 12,187 16,953 18,293

MARGINS

Gross margin 54% 51% 53% 49% 57% 55% 56% 52%

EBITDA margin 10% 11% 13% 15% 12% 16% 14% 12%

EBIT margin -2% 0% 2% 0% -2% 5% 2% 0%

EARNINGS PER SHARE (in €)

Diluted EPS -0.03 0.01 0.01 0.09 0.02 0.05 0.07 0.08

Diluted Adjusted EPS10.01 0.05 0.05 0.10 0.03 0.10 0.13 0.21

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QUARTERLY BALANCE SHEET STATISTICS (in € thousands) 31-Mar-15 30-Jun-15 30-Sep-15 31-Dec-15 31-Mar-16 30-Jun-16

ASSETS

Goodwill 381,569 381,569 381,569 403,437 403,529 400,412

Other intangible assets 797,524 807,822 813,185 810,908 806,684 806,271

Other non-current assets 59,505 68,543 70,703 75,908 75,594 80,097

TOTAL NON-CURRENT ASSETS 1,238,598 1,257,934 1,265,457 1,290,253 1,285,807 1,286,780

Inventories 46,747 48,488 53,848 48,657 57,476 50,955

Receivables, prepayments & derivatives 155,331 197,365 200,020 193,093 178,152 233,201

Cash and cash equivalents 117,367 121,627 124,427 147,565 114,630 136,391

TOTAL CURRENT ASSETS 319,445 367,480 378,295 389,315 350,258 420,547

TOTAL ASSETS 1,558,043 1,625,414 1,643,752 1,679,568 1,636,065 1,707,327

EQUITY AND LIABILITIES

TOTAL EQUITY 914,951 938,443 939,292 970,533 970,017 992,268

Deferred tax liability 166,578 162,366 159,206 149,806 140,000 137,986

Non-current borrowings 39,005 44,089 29,171 44,254 64,336 77,420

Current borrowings 0 0 0 4,287 0 0

Provisions 79,858 75,994 71,708 67,638 62,776 65,079

Trade payables 79,109 101,679 109,077 94,951 79,167 93,504

Deferred revenue 143,079 145,153 190,338 186,873 183,321 188,084

Accruals and other liabilities 135,463 157,690 144,960 161,226 136,448 152,986

TOTAL LIABILITIES 643,092 686,971 704,460 709,035 666,048 715,059

TOTAL EQUITY AND LIABILITIES 1,558,043 1,625,414 1,643,752 1,679,568 1,636,065 1,707,327

Net cash 77,367 76,627 94,427 98,278 49,630 58,391

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QUARTERLY CASH FLOW STATISTICS

(in € thousands) Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 H1 '16 FY '15

Operating result -5,069 579 4,887 203 -4,313 12,752 8,439 600

Financial gains/(losses) 1,970 1,974 -6,586 278 954 -553 401 -2,364

Depreciation and amortisation 26,493 27,262 27,805 41,536 29,870 30,941 60,811 123,096

Other -2,763 8 -578 -8,265 -2,270 5,792 3,522 -11,598

Changes in working capital1 -32,528 -1,914 23,407 24,580 -40,506 -14,225 -54,731 13,545

CASH GENERATED FROM OPERATIONS -11,897 27,909 48,935 58,332 -16,265 34,707 18,442 123,279

Interest received 116 173 103 112 42 44 86 504

Interest (paid) -239 -315 -347 -57 -264 -338 -602 -958

Corporate income taxes (paid)/received -1,209 20 -2,031 -830 -1,870 -1,151 -3,021 -4,050

CASH FLOWS FROM OPERATING ACTIVITIES -13,229 27,787 46,660 57,557 -18,357 33,262 14,905 118,775

CASH FLOWS FROM INVESTING ACTIVITIES -23,953 -44,107 -31,135 -55,020 -31,370 -30,156 -61,526 -154,215

CASH FLOWS FROM FINANCING ACTIVITIES 1,198 20,554 -11,965 19,484 17,092 19,162 36,254 29,271

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS -35,984 4,234 3,560 22,021 -32,635 22,268 -10,367 -6,169

1Includes movements in the non-current portion of deferred revenue presented under Non-Current liabilities.

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SEGMENT REPORTING

(in € millions) H1 '16

Unaudited

H1 '15

Unaudited

Revenue

Consumer 273.9 286.6

Automotive and Licensing 131.5 117.2

Telematics 77.0 66.1

TOTAL 482.4 469.9

EBIT

Consumer -4.4 1.3

Automotive and Licensing -6.2 -19.8

Telematics 22.6 17.8

Unallocated expenses -3.6 -3.8

TOTAL 8.4 -4.5

EBITDA

Consumer -1.2 6.6

Automotive and Licensing 44.5 24.0

Telematics 29.6 22.5

Unallocated expenses -3.6 -3.8

TOTAL 69.3 49.3

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OUTSTANDING SHARES AND ADJUSTED EPS Q2 ‘16

(A)

(B)

(C)

(A+B+C)

Common shares outstanding end of Q1 '16 230,774,051

Common shares outstanding end of Q2 '16 232,271,086

Average shares outstanding during Q2 '16 231,192,881

In the money share options end of Q1 '16 10,115,067 In the money share options end of Q2 '16 9,045,823

Average potential dilutive share options outstanding during Q2 '16* 9,755,143

Non dilutive share options: 6,426,002

Average shares outstanding from dilution of options** 3,329,141

Average shares outstanding from dilution of other equity-settled grants 0

Average fully diluted shares outstanding during Q2 '16*** 234,522,022

* In the money options during the quarter based on average share price for the quarter

** Weighted average diluted options based on the period outstanding during the quarter

*** The average share price for the quarter was €7.84

Adjusted earnings per share calculation (in € million)

Net result attributed to equity holders 12.2

Amortisation of acquired intangibles 13.7

Tax effect of adjustments -2.6

ADJUSTED EARNINGS 23.2

ADJUSTED EARNINGS PER SHARE (in €)

Basic 0.10

Diluted 0.10

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DISCLAIMER This presentation contains certain forward-looking statements with respect to the financial condition, results of operations and business of TomTom NV and its subsidiaries (referred to as 'the company' or ‘the group’) and certain of the plans and objectives of the company with respect to these items. In particular the words 'expect', 'anticipate', 'estimate', 'may', 'should', 'believe' and similar expressions are intended to identify forward-looking statements. By their nature, forward-looking statements involve risk and uncertainly because they relate to events and depend on circumstances that will occur in the future. Actual results may differ materially from those expressed in these forward-looking statements, and you should not place undue reliance on them. We have based these forward-looking statements on our current expectations and projections about future events, including numerous assumptions regarding our present and future business strategies, operations and the environment in which we will operate in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to, levels of customer spending in major economies, changes in consumer tastes and preferences, changes in law, the performance of the financial markets, the levels of marketing and promotional expenditures by the company and its competitors, raw materials and employee costs, changes in exchange and interest rates (in particular changes in the US dollar and GB pound versus the euro can materially affect results), changes in tax rates, future business combinations, acquisitions or disposals, the rate of technological changes, political and military developments in countries where the company operates and the risk of a downturn in the market.

Statements regarding market share, including the company's competitive position, contained in this document are based on outside sources such as specialized research institutes, industry and dealer panels in combination with management estimates. Where full-year information regarding 2015 is not yet available to the company, these statements may also be based on estimates and projections prepared by outside sources or management. Market shares are based on sales in units unless otherwise stated. The forward-looking statements contained refer only to the date in which they are made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this document.

No representation or warranty (express or implied) is made as to, and reliance should be placed on, any information, including projections, estimates, targets and opinions, contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein, and, accordingly, neither the company nor any of its subsidiary undertakings or any officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document.

You will be solely responsible for your own assessment of the market and the market position of the company and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the company’s business.

This document does not constitute or form part of, and should not be constructed as, an offer or invitation to subscribe for or purchase any securities and neither this document nor anything contained herein shall form the basis of, or be relied on in connection, with any offer or commitment whatsoever.

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TomTom NV

De Ruijterkade 154

1011 AC Amsterdam

The Netherlands

@: [email protected]

T: +31 20 757 5194

www.tomtom.com/investors